TAOISEACH Brian Cowen has described the decision of developers to pay more than half the cost of a new Luas line as a "win-win" situation.

The 4.6km line will extend the current Red line service by a further five stops to areas including Saggart, Cheeverstown and the Citywest business campus in Dublin.Yesterday, Mr Cowen said it was very significant that three developers had agreed to pay 55pc of the €150m cost.

"It really is an example of how you get a win-win situation in terms of development and also people getting a better quality of life due to the availability of public transport," Mr Cowen said.

The three developers include Citywest Hotel owner Jim Mansfield and Harcourt Developments, which count former RTE presenter Mike Murphy among its directors.

They have agreed to provide the land, a 300-space park and ride facility, and a cash donation of around €45m.

The Railway Procurement Agency (RPA) is providing the Luas trams, the track lines and the funding to run the service.

Mr Cowen said he believed the line extension would bring economic benefits to the west Tallaght community, which has suffered from social deprivation, vandalism and dereliction."I believe that this new line will act as a catalyst for further developments in the years ahead," he said.

The Luas Red line already runs from Tallaght to Connolly Station. The construction of the line extension, which links in at the Belgard stop, will begin this year and is due to be completed by the end of next year.

The Railway Procurement Agency has said that the project has been subject to a full cost benefit analysis and that the future revenue from passengers will be greater than the operating costs of the line.

Property developer Brendan Hickey, whose company is helping to fund the line extension, said the plan had taken eight years to come to fruition.

"There seems to be so much despair and despondency around that I think it's important that we send a message to the markets that we have great confidence in the future," he said.